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Millionaire Traders - Market Maker or Market Taker?
- Thread starter jbt
- Start date
Quote from jbt:
OK so here is the first point. Are you a market maker? or market taker?
Know the difference or suffer the consequences. Market makers basically trade reversion to the mean. That means they commit one of the cardinal sins of trading - they AVERAGE DOWN. That's right - that one of the dirty little secrets of the pros. They often add to the position because as Chuck Hays one of the best traders in the book notes, it's almost impossible to time it right on the first time.
The key of course is to know your uncle point. Ultimately EVERYONE takes a stop. Trading like a market maker does not mean you have no risk control, rather that you are acting much like an insurance company -taking in many premiums (frequent wins) and occasionally suffer a big loss that will hopefully be offset with all of the small profits accrued.
These guys accept the fact that once or twice a month they may lose 2 or 3 days winning in one trade. That what makes them a success.
Hi Boris,
Have almost finished reading the book. Great book, and I had a few questions.
Your question above, are you a market maker or market taker, does the "market maker" type of trader trade directionally or...? I don't quite understand the difference would you mind elaborating or giving an example of how this works.
Secondly, this might be a very naive question but of all the traders you interviewed, what kind of returns on capital were they making? I'm curious about what a scalper, FX trader and emini trader might make annually returns wise and also what's possible, if it's ok to talk about it.
Thanks.
http://alaskakid.wordpress.com/2009/02/05/ponzi-scheme-02-05-09-chuck-hays-crossfire-trading/
http://www.twincities.com/dakota/ci_11640821
Problem is that the allure and fascination of being known as a successful and wealthy trader is so great that so many of these folks will put up this false image using false money while they struggle to still figure out how to make money trading.
The CREDIT BUBBLE burst and now you have the fallout.
The fallout is still only in the 5th inning or so.
http://www.twincities.com/dakota/ci_11640821
Problem is that the allure and fascination of being known as a successful and wealthy trader is so great that so many of these folks will put up this false image using false money while they struggle to still figure out how to make money trading.
The CREDIT BUBBLE burst and now you have the fallout.
The fallout is still only in the 5th inning or so.
Quote from wave:
http://alaskakid.wordpress.com/2009/02/05/ponzi-scheme-02-05-09-chuck-hays-crossfire-trading/
http://www.twincities.com/dakota/ci_11640821
Problem is that the allure and fascination of being known as a successful and wealthy trader is so great that so many of these folks will put up this false image using false money while they struggle to still figure out how to make money trading.
The CREDIT BUBBLE burst and now you have the fallout.
The fallout is still only in the 5th inning or so.
Is that the same Chuck Hays that was highlighted in the book?
Quote from bugscoe:
Is that the same Chuck Hays that was highlighted in the book?
Sure looks like him. The Chuck Hays in the book was also from Minneapolis.
This is really pathetic. His style of trading (as described in the book) was the most interesting to me. I'm curious if the book authors did any due diligence to verify that he actually was ever a successful trader before he created his ponzi scheme trading fund.